The European Banking Authority (EBA) has officially recognized supervisory technology, commonly known as SupTech, as a vital instrument in the fight against money laundering and terrorist financing within the European Union’s financial regulatory framework. This development follows an in-depth investigation by the EBA into the use of emerging technological tools to support national competent authorities (NCAs) tasked with anti-money laundering (AML) and combating the financing of terrorism (CFT) supervision.
Background and Context
The confirmation of SupTech’s role comes amid the EU’s evolving AML/CFT landscape, highlighted by the June 2024 establishment of the Anti-Money Laundering and Countering the Financing of Terrorism Authority (AMLA). The AMLA is charged with coordination, harmonization, and strengthening of AML/CFT supervision across EU Member States.
The EBA undertook a comprehensive survey in November 2024 involving 31 NCAs from 25 EU member states and three non-EU countries, followed by a workshop in January 2025 conducted in collaboration with the European Commission’s AMLA Task Force. These initiatives aimed to identify trends, challenges, and best practices associated with SupTech in AML/CFT applications.
What is SupTech?
SupTech refers to the adoption of advanced data collection, analytical, and automation technologies by supervisory authorities to enhance regulatory oversight and efficiency. In the AML/CFT context, this includes artificial intelligence (AI), machine learning, natural language processing, blockchain analytics, automated risk scoring systems, and cloud computing platforms.
Key Findings from the EBA Report
The EBA’s report, published in August 2025, reveals that almost half (47%) of SupTech tools or projects identified across the EU are already operational. An additional 38% are under active development, with the remaining 15% in exploratory phases. These technologies predominantly focus on automating high-volume data tasks including data storage, advanced analytics, risk assessment, and case management.
National authorities have reported tangible benefits from SupTech implementation, including:
- Improved data quality
- Faster and more accurate risk identification and assessment
- Enhanced operational efficiency
- Strengthened collaboration across jurisdictions
The report specifically highlights examples such as AI-driven risk engines, blockchain monitoring platforms for cryptocurrency transactions, and automated supervisory planning tools as effective solutions already in use.
Challenges and Barriers to Adoption
Despite these positive outcomes, the report notes that most authorities describe their integration of SupTech as only “moderately prepared.” Several pervasive challenges remain:
- Data quality and governance issues due to fragmented or inconsistent datasets
- Resource limitations, including shortages in skilled personnel and legacy IT infrastructure
- Legal uncertainties regarding data privacy and accountability in automated decisions
- Operational risks such as system vulnerabilities and algorithmic opacity
- Cultural resistance within supervisory bodies to full digital adoption
- Limited cross-border cooperation affecting tool interoperability and scalability
Best Practices and Recommendations
The EBA emphasizes the importance of a needs-driven approach to SupTech development, urging NCAs to focus on solving concrete supervisory challenges rather than pursuing technology for its own sake. Successful strategies that have emerged include:
- Cultivating a digital-first culture supported by training and strong leadership
- Implementing structured change management frameworks
- Establishing robust data governance and privacy safeguards, including synthetic data techniques to protect sensitive information
- Setting clear performance metrics to measure the impact of technology adoption
- Piloting secure, privacy-preserving platforms for cross-border data sharing, including the use of AI and federated learning methods
The Role of AMLA and Future Outlook
With the newly created AMLA now operational, the EBA anticipates it will play a critical role in scaling SupTech solutions. AMLA’s functions include standardizing supervisory approaches across member states, facilitating pooled resources, and promoting joint technology initiatives that can overcome national constraints and fragmentation.
The report concludes on an optimistic note, stating that the “future of AML/CFT supervision in the EU depends on the successful integration of SupTech, enabling authorities to stay ahead of emerging financial crime risks and ensuring the EU remains a global leader in the fight against financial crime.”
AML Editor’s article was originally published in funds-europe on 13 August 2025